Key Takeaways
- Trump favors Bitcoin production in the US to improve energy dominance.
- Currently, less than 50% of the computing power for Bitcoin mining is located in the US, facing competition from countries like China and Russia.
Trump has called for all remaining bitcoin to be mined in the US, but experts believe practical challenges like global competition and the decentralized nature of bitcoin could make that nearly impossible.
In June, Trump met with US bitcoin mining executives at Mar-a-Lago to discuss the industry’s potential for job creation and energy dominance. The meeting was attended by representatives of Riot Platforms, MARA Holdings, TeraWulf, CleanSpark and Core Scientific.
After the meeting Trump published on Truth Social:
“Biden’s hatred of bitcoin only helps China, Russia and the radical communist left.” We want all remaining Bitcoin to be MADE IN THE USA!!! It will help us to be ENERGY DOMINANT.”
After making his initial pledge, Trump continued to emphasize his commitment to domestic Bitcoin production. He has stated in subsequent engagements that if crypto is to define the future, he wants it to be mined in the US.
Experts, however, are skeptical about the feasibility of Trump’s promise.
“It’s a Trump-like comment, but it’s definitely not in reality,” said Ethan Vera, chief operating officer of Seattle-based Lucor Technology, which provides software and services to miners. said Bloomberg.
Since approximately 95% of the total Bitcoin supply of 21 million has already been mined, exercising control over future production presents considerable challenges.
Not only that, ongoing global competition makes it difficult for the US to dominate bitcoin production, says Taras Kulik, CEO of Sintek Digital. US-based miners currently account for less than 50% of the total computing power used in Bitcoin mining.
Meanwhile, countries like China, Kazakhstan and Russia, which often benefit from lower energy costs and less regulatory scrutiny, have become home to large-scale bitcoin mining operations.
Russia recently introduced a legal framework that defines the rights and obligations of miners. law, signed by President Vladimir Putinrecognizes mining as a legitimate economic activity and allows registered legal entities and individual entrepreneurs to engage in it.
The decentralized nature of Bitcoin allows miners around the world to participate in validating transactions and creating coins. Countries with cheaper energy sources, including developing markets in Africa such as Ethiopia, are becoming attractive locations for mining operations.
The newly elected president has proposed high tariffs on Chinese imports, arguing that such measures would protect American industry and jobs. If it adheres to these tariffs, it would increase costs for US miners who depend on bitcoin mining equipment coming from China.
As a result, US miners could struggle to compete globally as their operating costs would be higher.
